A State fund to buy distressed properties from banks and a pledge to build 45,000 new social houses by 2021 are at the centre of the Government’s much anticipated plan to tackle the housing crisis.
Minister for Housing and Planning, Simon Coveney, is due to publish his Housing Action Plan on Tuesday, subject to Cabinet approval.
A draft copy of the plan has been seen by The Irish Times.
The 52-page document, dated the end of last month, sets out plans to deliver "mixed tenure" housing, on public land, to speed up the planning process for social housing and to establish a "procurement centre of excellence" in the Housing Agency.
Built around seven “pillars”, the plan says the State must intervene in the housing crisis to “reduce the scope for the housing sector to be the source of damaging behaviour and dynamics which could threaten our future prosperity”.
It says: “The State must ensure that its actions support the renewal of the [construction and development] industries, especially in terms of their capacity to undertake volume building in areas of most pressing need.”
Sinn Féin spokesman on housing, Eoin Ó Broin, described the plan as “deeply disappointing”.
He added: “The approach remains rooted in the idea that the private housing market is best placed to address the majority of people’s housing needs, including a significant portion of those in need of social housing.”
The draft says little on homelessness, other than that Government will “decant as many homeless families and individuals as possible” out of hotels and B&Bs, into modular and local authority housing.
“While every effort will be made to house families... in areas of their preference, this may not always be possible,” it says. Refusals of “reasonable offers” will be discouraged.
Measures to kick-start construction
Among the measures to kick-start construction will be a €200 million local infrastructure housing activation fund to “relieve critical infrastructural blockages”.
In addition, local authorities will be empowered to pay developers upfront for Part V social housing, rather than wait to pay on delivery. Protections for local authorities will be built-in, in case the housing is not delivered.
A new special-purpose vehicle will be established to provide finding for social and private housing projects.
This SPV will work under the auspices of the National Treasury Management Agency, using funds from the Ireland Strategic Investment Fund (formerly the Pension Reserve Fund), to invest in housing for the private and social rented markets. Rental return will service the debts, keeping the process off the Government balance sheet.
The Housing Agency is to get a €70 million capital fund to buy properties in mortgage distress. This will “yield in the order of 400 houses/apartments”, it says.
A white paper on the private rented sector will be published in “Autumn 2016” says the plan, “structured around four key areas: security [of tenure], standards, supply and services”.
An affordable rental sector - ie priced below market rates - will be developed by local authorities in partnership with developers.
Long-term investors, such as pension funds, are to be invited to develop a build-to-rent sector, a new concept in Ireland.
“These are homes built specifically for the rental market (also referred to as multi-family units in the USA). Build-to-rent is larger scale, with on-site amenities, and targeted to institutional owners rather than individual buy-to-let landlords,” says the plan.
These would be aimed at low-income households who nonetheless have incomes that are too high to qualify for social housing.
The draft does not detail the cost of delivering additional social housing units, though the Oireachtas Housing and Homelessness Committee, which last month recommended 50,000 new units, put the cost at €1.8 billion per year, or €9 billion over five years.